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What is PLI Scheme?

What is PLI Scheme?


Production Linked Incentive (PLI) scheme was launched by the central government to boost domestic manufacturing and make India globally competitive. The Government of India expects the nation to be well-positioned as a global hub for manufacturing.

The PLI scheme aims to give companies incentives on incremental sales from products manufactured in domestic units. PLI scheme was launched in March 2020 to boost domestic manufacturing and cut down on import bills. This scheme aims to invite foreign companies to set up their stores in India.

Need of PLI Scheme
PLI scheme encourages local companies to set up and expand their existing manufacturing units. The objective of this scheme is to make India more compliant with the commitments of the World Trade Organization and make it non-discriminatory and neutral regarding domestic sales and exports.

The idea of such a scheme is important as the government cannot continue making investments in the capital intensive sectors which require longer times to start giving returns. The PLI scheme is expected to give the right impetus to the economy of the nation and aims to promote job creation. PLI scheme will link India to the global value chain and build a self-reliant India making it an important manufacturing and investment hub.

Sectors under PLI Scheme
The government had earlier approved PLI scheme for many key sectors including Advance Chemistry, Electronic and Technology Products, Automobiles and components, Pharmaceutical drugs, Telecom and Networking Products, Textile Products: MMF segment and technical textiles, Food Products, High Efficacy Solar PV Modules, White Goods such as AC’s and LED Specialty Steel and more.

Earlier, in April, Union Cabinet approved Rs 4,500 crore PLI to add 10,000 MW capacity of integrated solar PV modules manufacturing plants. This decision will bring a direct investment of around Rs 17,200 crores in solar PV Manufacturing and will augment capacities in the all-important solar sector and make India a hub of renewable energy. This scheme is likely to create a direct employment opportunity of around 30,000 and indirect employment of around 1.2 lakh.

Union Cabinet approved a PLI scheme for white goods (air-conditioners and LED lights) with a budgetary outlay of Rs 6,238 crore in April 2021. This is considered as another initiative to strengthen the movement to create a self-reliant India. Previously, Cabinet approved Rs 10,900 Crore PLI scheme for the Food Processing Sector to boost exports and facilitate the expansion of food processing capacity to generate processed food output worth approx. Rs 33,494 crore.

Cabinet had approved an amount of Rs 7,350 crore PLI Scheme in February 2021, for boosting the local manufacturing and export of IT products like laptops, tablets, personal computers and servers. This approved scheme for IT hardware will help the nation export IT goods worth Rs 2.45 lakh crore. Many more guidelines have been approved which will be regularly updated on this website. For further details, keep checking this website frequently.

Anand Gupta Editor - EQ Int'l Media Network